The U.S. has reduced its purchase of Nigeria’s oil and gas.
The House of Representatives on Thursday mandated its committees on Petroleum Resources (Upstream and Downstream), National Planning, and Finance, to investigate relevant government agencies over dwindling oil revenue in Nigeria.
The committees are expected to report back to the House within four weeks.
This resolution followed a motion moved by Ben Nwankwo (PDP-Anambra) which was unanimously adopted.
Mr. Nwankwo said that the near total dependence on oil as the major source of revenue had almost reduced the country to a mono-product economy.
“This reliance on oil has made Nigeria’s economy not only fragile but also extremely vulnerable and under constant threats from even the slightest developments in the world oil market,’’ he said.
According to him, Nigeria’s crude oil market is under serious threat arising from the discovery of shale gas through hydraulic fracturing or franking.
Franking is a process of forcing water, chemicals and sand at high pressure into underground rocks.
Mr. Nwankwo said that the widespread use of franking process to produce oil and gas had led to a significant reduction in prices of domestic gas in the United States of America.
The legislator said that the severity of the situation was recently admitted by the Organisation of Petroleum Exporting Countries (OPEC) at its meeting in Vienna.
He said that franking had made it possible for the USA to produce large volumes of shale gas as a source of energy, which had reduced its import of crude from Nigeria from 11 per cent to five per cent.
According to Mr. Nwankwo, Nigeria’s Liquefied Natural Gas (NLNG) export to the United States has substantially declined since 2011.
He said that dwindling revenue from crude oil was threatening the implementation of the 2013 budget, adding that it could get worse as more countries and corporations invest in the production of energy through franking.
Godfrey Gaiya (PDP-Kaduna) said that the motion was a wake-up call for the National Assembly to take steps to put Nigeria at par with other countries.
Forte Dike (PDP-Anambra) said the motion was a step in the right direction as it would help in making the country diversify its economy.
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